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It just means that you can download apps that aren't from the Android Market aka Google Play, and it does not require that you root your phone. While Google doesn't have a perfect security record for apps through Google Play, it does screen the apps and relatively few really questionable apps get through. Of course, sideloading can also refer to apps installed off of Amazon, which is probably just as secure (or more so) than those offered by Google Play.
You are obviously taking a big chance if you install an app off of Joe Schmo's website that you just stumbled upon, but I don't know of too many people that would take such an obvious risk. It isn't all bad though, if you are active in the development community and are familiar with other developers, it allows you to beta test. Actually, you would have to sideload you own apps if you code your own.